May 12, 2025

The United States and China have reached a significant milestone in their trade relations by agreeing to reduce tariffs on each other's goods. This move comes as a relief after a prolonged period of escalating trade tensions that had a destabilizing effect on the global economy. US Treasury Secretary Scott Bessent announced the breakthrough following talks in Geneva with Chinese officials. The agreement includes a 90-day pause on implementing further measures, with tariffs being scaled down by over 100% to reach 10%. The decision marks a crucial step towards de-escalation and normalizing trade between the two largest economies in the world. Both countries have expressed satisfaction with the deal, emphasizing their commitment to balanced trade relations. The talks in Geneva were the first high-level, face-to-face discussions between US and Chinese economic representatives since President Donald Trump's return to power. President Trump's administration had originally imposed significant tariffs on Chinese imports, and subsequent adjustments were made under the Biden administration. China responded by restricting exports of essential materials and increasing tariffs on American goods. The tit-for-tat tariff battle had stalled approximately $600 billion in bilateral trade, causing disruptions in supply chains and raising concerns about economic stagnation. The positive outcome of the recent negotiations has sparked optimism in financial markets, with stock futures rising and the dollar strengthening against other major currencies. The agreement offers hope that a global recession could be averted, providing some stability to the uncertain economic landscape. Moving forward, both the US and China are expected to work towards further improving trade relations and fostering a more cooperative economic environment.

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Tags: Us-china trade deal, Tariffs, Trade war, Global economy,